I'm a writer and a Fellow at the Ethics and Public Policy Center. I most recently worked as an analyst, and before that at Business Insider, where I co-created BI Intelligence, the company's market research service. I live in Paris with my beloved wife and daughter.

With No-Profit Quarter, Amazon's Jeff Bezos Thumbs His Nose At Wall Street And Shows He's The New Steve Jobs

Amazon reported earnings yesterday, and Wall Street judged it to be a “miss” because Amazon posted a lower than expected (indeed, practically inexistant) $.01 profit per share, and forecast a loss for next quarter.

Watchers of Amazon and Jeff Bezos can’t be surprised, however. One of Jeff Bezos’ hallmarks is investing over the long term and thumbing his nose at Wall Street’s short term thinking, and this quarter was a perfect example.

Amazon showed lower than expected profits, not because its business is deteriorating, but because it is investing heavily into existing and new businesses.

For example, a big chunk of the lower profits came from Amazon’s acquisitions of Kiva Systems, a company that makes robots that make warehouse systems more efficients. The Kiva robots are well known in logistics for being outstanding. By buying Kiva, Amazon has secured an amazing, long-term competitive advantage that will pay dividends over many years.

Amazon is also investing in its Kindle ecosystem of content and devices, selling devices at a loss to get people hooked into Amazon’s ecosystem of content and commerce–again, a wonderful investment.

And finally, it’s investing in more warehouses and data centers for its shipping business and its rip-roaring cloud business.

So yes, Amazon has been posting lousy profits for a while, and will also keep doing so for a while.

Who could have predicted that?

(Image credit: Getty Images via @daylife)

Anybody who read Jeff Bezos’ famous 1997 letter to shareholders, where he writes (PDF):

When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we’ll take the cash flows.

This is exactly what Bezos is doing. By foregoing higher short-term profits and investing in the future of the business, Jeff Bezos is thumbing his nose at Wall Street and increasing the value of the company. He did that ten years ago, and when that happened he was roundly mocked for having a business that supposedly could never show a profit, and yet it was because of those investments that Amazon survived the dotcom busts and became the most profitable online retailer. Now that we’re moving to the cloud, post-PC era, he’s doing it again.

The tech world has arguably produced only one other entrepreneur with this kind of strategic vision and long-term focus, and that was Steve Jobs. Among many other things, this quarter shows that Jeff Bezos has as good a claim as any to Jobs’ throne as the greatest tech entrepreneur alive.

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